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  Banking Finance

Govt allows cities new cash sources

The Government has given its nod to major economic hubs Ha Noi and HCM City to raise capital for development projects through new sources.

Prime Minister Phan Van Khai signed decrees 123/2004 and 124/2004 on Tuesday allowing them to use their budget and other financial sources to develop their municipal infrastructure.

Ha Noi, as the social and economic centre of the northern region and whole nation, is granted special State budgetary allocations, in addition to its own sources.

HCM City can auction land use rights to raise money for infrastructure development.

The Government will also give the two cities priority in allocating ODA (official development assistance) capital to invest in urban, environmental and public welfare infrastructure.

Besides, the new decrees allow Ha Noi and HCM City to raise domestic capital through issue of municipal bonds and other channels under current laws and regulations.

They can also seek loans from overseas to finance the development of infrastructure.

However, they must work out the details of projects and identify loan sources and seek opinions from the Ministry of Finance, Ministry of Planning and Investment and the State Bank before submission to the prime minister.

The two cities will have the right to make an independent decision on non-refundable aid.

However, for aid that involves religion, national defence and security issues, they must seek permission from the prime minister.

VNS - (24/05/2004)

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